Individual Choice Health Reimbursement Accounts (ICHRA) are basically a defined contribution model for employer sponsored insurance. Employers give groups of employees a pre-defined lump sum and the individuals then buy ACA plans. The new legislation signed yesterday widens the possibility space as it is now a creature of law rather than regulation. The big argument for ICHRA is for employers it gives cost predictability and for individuals it breaks the principal agent problem of HR buying way too much network/coverage than most people actually want.
It is predicated on the ACA individual markets being cost-competitive to cost-dominant over small group fully insured markets.
These estimates also assume average unsubsidized premiums only go up 4.3% in 2026.
So far the average preliminary rate hikes are averaging nearly 19%. 👀
— Charles Gaba ✡️ (@charlesgaba.com) July 5, 2025 at 9:56 AM
How does this scheme work in an ACA market that everyone is predicting will be much smaller, much more morbid and much more expensive?
I’m stuck at the moment.
Dorothy A. Winsor
Oops. Wrong post.
Another Scott
I’m remembering dsquared’s reminder to us that POSIWID – the Purpose Of a System Is What It Does.
I appreciate your ability to look past the language and dig into how the systems actually behave as a result of the incentives (and punishments) present. Good luck! :-/
If they succeed in breaking the PPACA, it will be because they actively did things to break it. Their mouth noises about freedom and fighting waste, fraud, and abuse won’t change that, because we’ll see that the actual outcomes were determined by their actions – their purpose.
Grr…
Best wishes,
Scott.
jonas
Republicans couldn’t just kill the ACA because it’s too popular (see 2018 midterms), so they’re doing it via death by a thousand cuts.
barbequebob
Is “work” at end of first paragraph the intended word?
lowtechcyclist
Wonder how Fox News will blame it on Biden/Dems when people’s premiums jump by 20%?
Librettist
The healthcare “market” going forward?
“Welcome to Walmart, the happiest place on earth…”
Steve LaBonne
It’s really hard for normal human beings to grasp that Republicans are not inflicting all this damage for political advantage. They know it’s unpopular. They’re doing it because they are evil, they don’t believe non-rich people’s lives matter even a tiny bit, and they have been working for decades for the opportunity to harm us. Or as the saying goes, the cruelty is the point.
jonas
“This is what happens when you manipulate and distort the free market with subsidies and regulations!!”
jonas
And of course for Trump, it’s personal — Obama did it so he must undo it come hell or high water. He tried once to blow it up all at once and that didn’t work thanks to one John McCain, so he’s just going about it the roundabout way now, chipping away at small parts of it until it all collapses.
Anyway
@Steve LaBonne: so much damage done by this administration in a mere 6 months?!?!! I shudder to think of what’s in store over the next 3 1/2 years…
i understand it’s harder and takes longer to build than to tear it down —- saddens me when I hear that many elements in the IRA were just getting started to be implemented and the benefits had yet to reach the recipients.
David Anderson
Updated
RevRick
The thing is the more complex a system is the greater its fragility. And the two most complex systems in the United States today are finance and healthcare. And they are greatly intertwined.
By making the ACA unworkable for a huge slice of its participants, it may create a death spiral in the private health insurance sector. After all, if people drop out of the health insurance market, they will either have to pony up expenses themselves or become a worrisome liability for providers. Providers, in turn, will seek to make up their losses elsewhere, but Medicaid will be decimated, so no help there, and the Medicare trust fund is rapidly headed for depletion. That means the private health insurance market will be asked to take on a bigger share, but…us aging Boomers will demand more services, which will place more stress on the system.
When will the stresses of government retreat from being the source of revenue to providers meet increasing demands causing the system to fracture?
Health care is about one fifth of our economy. It provides the greatest good in life for all of us. But the GOP seems to think that they can bleed it without causing a failure.
What’s likely to happen is a gathering collapse. A retreat of providers from unprofitable markets. Closures of hospitals in rural areas and closures of nursing homes. Job losses in areas that depend on that local hospital/nursing home to anchor the local economy. A pileup of bad debt, both for providers and consumers, that spills over to financial markets.
Just a reminder that it only took about 4% of the housing market to go south for us to end up with the Great Recession. And health care is a far larger sector of the economy.
RevRick
@Anyway: I am part of a small group that is advocating for the benefits of the IRA related to climate change in the PA-7 Congressional District. We call ourselves Climate Hope Affiliates.
We see what the GOP did was essentially robbing from the future to give luxuries to those who already have them.
Hunter Gathers
@RevRick: Every health care provider company is going to walk into work on Monday and will have to figure out what to do about the huge hole in thier budget in 18 months.
The non-profits and those with thin profit margins are gonna have to start delaying projects and maintenance, laying people off and announce clinic/hospital/nursing home closures. Rural health systems literally can not operate without Medicaid dollars.
Pushing off the cuts to 2027 doesn’t delay the pain in this scenario.
Ohio Mom
@RevRick: I am very much expecting a deep economic downturn.
But I can’t see what I can do about it. This isn’t news of a blizzard coming, where I can run to the grocery store and stock up on provisions and make sure we have enough salt to keep the driveway ice-free.
I can’t cancel the trip to Europe we didn’t plan.
Anonymous At Work
Best case scenario seems to be a bimodal distribution for ACA marketplaces between the young/healthy and the morbid, where the median price averages out to something doable. There are a lot of assumptions in there, with enough weight on them that Atlas is impressed at their load-bearing capability, though.
What I don’t know well enough to handle is networking structures allowed in states with rural/urban splits. If I could, I’d focus on urban areas, networks heavy with GCPs and as low as possible on specialists (“Sorry, the endocrinologists in network are not accepting new patients…”) and bribe the state lege to let me do it.
If that’s possible, we’d see an ACA marketplace that follows the letter of the law but the spirit of the pre-ACA times of adverse selection, only minus the same quantity/quality of hookers-and-blow.
Does that seem about right?
Anonymous At Work
@Hunter Gathers: Nah, most of them cancelled their July 4th plans to work through the weekend, probably to find a Venture Capitalist to whom they would sell their facility, or else start a drawdown now, rather than shop at Costco/Sam’s Club for antacid later.
jonas
It still is absolutely infuriating and gobsmacking that vast swathes of the electorate were completely oblivious to any of these landmark bills that Biden signed or of their long-term benefits for labor and the economy. As far as they were concerned all he ever did was raise the price of eggs.
Baud
By blaming immigrants.
Librettist
It isn’t only a “rurals” issue. Marginal medical systems (by patient demographics and scale) in metro regions will get liquidated via VC.
Librettist
The false promise of private sector retail moving into the PCP space to “control costs” has been a repeated and expensive failure.
Steve LaBonne
@jonas: Jefferson wanted expansion of the franchise to go hand in hand with raising the educational level of “the people” to the point where they would have a basic understanding of public affairs (which of course were far simpler in his day). He did not dream that democracy would be possible when large numbers of people don’t know or care what’s going on but vote anyway. I don’t know what to do about this.
dnfree
@RevRick: I appreciate your work on climate change and I appreciate you sharing it here.
artem1s
Don’t forget it was the rising costs of health care prior to ACA that drove a lot people to take out second, third mortgages so they could pay off their medical bills. The W administration undid all those gains in home ownership that the Clinton administration put in place. A lot of people will end up homeless and dying on the street this time.
Steve LaBonne
@artem1s: Unfortunately that is a description of Republican paradise.
dnfree
@Anonymous At Work: Interesting you mention endocrinologists. My husband was referred to one last year and the first available appointment was six months off. This concerned me, because I have issues that may at some point require an endocrinologist. So I asked the endocrinologist at my husband’s appointment if I should get scheduled for one now just so I am a patient. He suggested yes, so I got one (six months off) and am now a patient of that doctor mostly in case of future need.
People sometimes mock other countries with universal health care because it can take months to get a necessary appointment, compared to our supposedly more available private system, but we’re at the same point of scarcity. People who don’t currently need a specialist just don’t know it yet.
Steve LaBonne
@dnfree: Specialist? In a lot of places good luck finding a primary care physician.
Lobo
@RevRick: This what I meant by a new paradigm. The systemic shifts will be huge. How it plays out? What I know is there will be lots of needless pain and suffering.
WTFGhost
@Another Scott: Individual accounts are primarily a tax shelter for the wealthy. I don’t know if these accounts are the same thing – they sound like the old section125 cafeteria plans, except it’s ACA rather than private policies.
If the money can go to whatever the high-deductible health savings plan is, then, the expansion is probably just an expansion of the tax shelter, where you “self direct” your most profitable investments into tax-deferred savings.
Anonymous At Work
@dnfree: It took me 6 months for my first appointment with one, and my 3-month follow-up was 6~7 months later. However, I dropped my A1C over three points with a new medication. When she made (what I thought was) a dismissive comment about her role, I (probably in horrible patronizing way) told her how “special” specialists actually are.
But the idea is to keep sick people who require specialists off of the new narrow networks as possible. If you can’t price out the sick anymore, you can inconvenience them out, can’t you? While forcing them to out-of-network care to keep in-network costs down?
Rusty
@Hunter Gathers: A good friend that is a department head across all the hospitals of a mid-sized, nonprofit, health care system said the estimate from the original house version was a 20% drop in revenue. The senate version cut even more, so that estimate will go up. Yes, all these care providers will be cutting their 2026 budgets, if not sooner.
WTFGhost
@jonas: And it should be continuously pointed out, he’s doing this because he likes to hurt people. He wants to hurt Obama, so, “see, I’m destroying your precious achievement, na na nana na!”
Point out that he’s succeeding like his birthday parade.
Point out the only thing he “obliterated” was a bunch of rock, and the Iranians are probably thinking “ah, so that’s where bombs would hit, coo-cool, we wanted to do some redecorating, more natural (appearing) lighting, a few silk flowers, plus some real flower stations – no one wants to *remember* they’re buried under a mountain, but they sure will enjoy knowing they’re *untouchable!*”
He wants to be the bogeyman. Well, since that was pronounced “boogie” man, I always thought he was an anthropomorphized pillar of snot (well, I did once I knew big words, like “pillar”). I’m fine with him being the boogie-man.
And that is what we should make him. Not a grand hero, but a disgusting villain, fat, wobbling jowls, stinks lie BO, bronzer, and the worst fart you ever laid, tries to rape porn stars using his status as a legitimate member of the entertainment establishment, then brags about it, and then, is so ashamed of it, he doesn’t even tell his lawyers *the truth*. Which means he’s the ultimate cowardly bully. He can’t even face his own accuser, because he’s that much of a Pathetic Unclean Secret Service-protected Yellowbelly, or… okay, I guess I *still* can’t call him that, but… it’s *the* word of contempt, that I learned growing up.
And I swear before heaven and earth, I was in my teens before the idea that it also meant, you know, a vulva, because I just assumed they were thinking “German Shepherd vs 10lb pussy-cat.”
Jackie
@jonas:
BINGO! FFOTUS’s never ending Revenge and Revoke campaign…😡
sab
@Steve LaBonne: In Jefferson’s day a substantial portion of the population could not even read. New Englanders valued schools but the South not so much.
Andrew Johnson was taught to read by his wife. He had been apprenticed as a child and reading was not part of the training package.
VFX Lurker
One bit I can’t figure out…if doctors, nurses and technicians lose their jobs, where do they and their student debt go?
What an unholy mess.
opiejeanne
@Anonymous At Work: The endocrinologists are already in short supply in western Washington, so many retired at the beginning of the year. I have osteoporosis and need to be treated for it, but in January I was told I would have to wait until December to see anyone. That has now been changed to August because a clever person in administration is sending me to a rheumatologist, because they can treat osteoporosis and are somewhat less busy. The surgeon attending to my broken ankle was astonished that my own GP didn’t want to start me on a treatment right away and chose to wait. He was the one who sounded the alarms when I broke the 4th metatarsil in my right foot in January and told me to get my NP to schedule a bone scan.
So I wait and try not to fall down again. Still wearing the boot, still in a brace for my left wrist, but I have PT for both this week so the end is in sight.
Matt
The company I work for switched to ICHRA in April because our previous provider was quoting a 40% YoY premium increase.
IMO it’s an absolutely garbage system; you get shown eleven-zillion Marketplace plans that are all nearly identical but with different prices, then choose which company you’ll get fucked up the ass by. Finding a plan that covers your doctors is a huge hassle as it involves going to each insurer’s site and remembering if your ICHRA is selling the “ACA Network Faasfasf” or the “ACA Network Gdfgsdfsdfa” with different names at every one.
If you pick wrong, you either end up massively out-of-pocket or you have to switch doctors!
In an ideal world, you’d get a summary of the care you received last year complete with billing codes etc and then get quotes from each insurer for how much _they_ would have paid. That’ll never happen, because they prefer the “SURPRISE YOU’RE GETTING REAMED!” billing approach.
HopefullyNotcassandra
@lowtechcyclist: I do believe that is in fact coming to an exchange near you
quite soon too
opiejeanne
@HopefullyNotcassandra: We are insured through CalPERS (California public employees retirement system) and Medicare, which picks up most of the cost. Republicans not just in California but in many other states have wanted to get rid of CalPERS because it wields so much power economically that it can dictate the behavior of large corporations to behave themselves. This BS with Medicaid and Medicare is them getting their foot in the door to bring it down.
HopefullyNotcassandra
@Librettist: yes. Medicare remains superior in cost and quality to the Medicare advantage and Goypers just don’t care.
HopefullyNotcassandra
@artem1s: a lot of people ended up homeless last time.
HopefullyNotcassandra
@VFX Lurker: we have doctor and nurse shortages all over the world. They should find safe harbor somewhere.
HopefullyNotcassandra
@opiejeanne: how so? I had not thought of that angle. I used to help out an elderly friend who had CALPERS. CALPERS was one thing in her life that never increased her stress.
RevRick
@Hunter Gathers:
@Ohio Mom: @Lobo: @VFX Lurker:
This doesn’t factor in the mandatory cuts to Medicare by the 2010 Pay-Go requirements. That’s $45 billion right off the bat starting next year. I’ve already been warned that our supplemental insurance will likely go up 30%.
opiejeanne
@HopefullyNotcassandra: If the loss of MedicAid causes the fracdtures described above, as much as 40%, it will affect Medicare and CalPERS would have to either increase their premiums or lower their liability for coverage. That will send ripples throughout the system, weakening it overall.
Tenar Arha
I’m wondering about premiums in Massachusetts, bc of how our state law precedes the ACA, but it also had a Medicaid part that allowed almost everyone to participate in the marketplace. What happens now without that money?
West of the Rockies
We are still, unfortunately, very much in the FA stage of things. The FO stage awaits. Evil person that I am, i will enjoy the spectacle of Trumplings shitting their britches with grief.
Ohio Mom
@opiejeanne: I hope you are taking 600 mg Calcium with Magnesium and Vitamin D combo pills twice a day, and an extra Vitamn D once a day wouldn’t hurt. Weight-bearing excerise (including slow walking, which you are obviously limiting these days) also helps to build bones.
But in my experience, nothing works better than a shot of Prolia.
opiejeanne
@Ohio Mom: Thanks for the advice, and no I’m not. My doctor hasn’t given me any advice at all and I’m more than annoyed about that right now.
Kayla Rudbek
@dnfree: I think it took me roughly a year to get my colonoscopy done (between referral and scheduling)